Cap on Rewards for Reporting Collusion Abolished... Up to 67.1 Billion Won Possible for Wheat Flour Case

Revision of Reward Payment Regulations
Up to 10% of Fines Can Be Awarded

Yonhap News

The competition authorities will completely abolish the cap on reward payments for internal whistleblowing of unfair practices such as collusion, in an effort to encourage more internal reporting. The payment rate will also be revised, making it possible for whistleblowers to receive rewards worth hundreds of billions of won for reporting large-scale cases.

On June 17, the Korea Fair Trade Commission (KFTC) announced that it has revised the “Regulations on Reward Payments to Whistleblowers of Violations of the Monopoly Regulation and Fair Trade Act, etc.” and that the new rules will take effect from June 18.

With this revision, the previous cap on reward payments, which was limited to 3 billion won, will be removed. The KFTC explained that, for example, if the recent wheat flour price-fixing case involving milling companies had been reported with the highest level of evidence, the whistleblower could have received up to 67.1 billion won, which is 10% of the total 671 billion won in fines imposed.

This represents a significant increase compared to the previous maximum reward, which was approximately 1.75 billion won paid for the 2021 rebar scrap price-fixing case under the former regulations.

The revised regulations also expand the scope of evidence recognized for unfair support or private interest appropriation. Previously, only information related to “transaction details” or “transaction conditions” was accepted, but now information related to “intent to provide support” that is necessary to prove a violation will also be recognized as evidence.

For unfair support or private interest appropriation that favors related parties, it is often difficult to prove illegality by transaction conditions alone. Since proving the intent to provide support is crucial, the revision aims to encourage more internal whistleblowing.

If a whistleblower fails to fulfill social responsibilities, a portion of the reward will be reduced to prevent abuse of the system. The reduction will consider the whistleblower’s level of cooperation with the investigation and whether they were involved in the violation, but it will not exceed 30% so as not to discourage reporting.

An official from the KFTC stated, “This will stimulate more internal whistleblowing on major collusive activities and send a warning that anyone involved internally can make a report, thereby helping to curb unfair trade practices.”

This content was produced with the assistance of AI translation services.